BUSINESS NEWS - Nearly 40% of MTN shareholders voted against the advisory endorsement of the group’s remuneration policy at its AGM on Thursday.
Only 62.64% of those who voted, did so in favour. This is significantly lower than the 67.81% who voted yes at the AGM in May last year (As recently as 2015, over 94% of shareholders voted in favour on this matter). This puts MTN in or near the bottom five of the Top 100 companies listed on the JSE when it comes to shareholder votes in favour of remuneration policies (see These 14 Top 100 companies are under scrutiny for exec pay)
Worse, only 78.9% of shareholders voted on the endorsement, versus 83% for other resolutions. Last year, a similar number voted on remuneration but 3.17% specifically abstained (this year, only 0.51% did so).
Chris Maroleng, MTN Group Executive for Corporate Affairs says “We have taken note of the outcome of the shareholders vote on MTN’s remuneration policy at the 22nd Annual General Meeting held on 25 May 2017. Notwithstanding the fact that the resolution was approved, we take note of the fact that some shareholders voted against it. We will be engaging with these shareholders on the matter.
“MTN’s pay structures are externally competitive, compliant with existing internal policies and governance structures such as the King Code principles, taking into account the availability of skills and the changing needs of our business.”
Given the large vote against the group’s remuneration policy, it is almost certain its largest shareholder, the Public Investment Corporation (PIC), voted no, as it did at the May 2016 AGM. The PIC, which manages assets on behalf of the Government Employees Pension Fund, held 14.92% of MTN as at 31 December 2016.
Last year, it noted that it voted against the endorsement on remuneration as “whilst there is some additional policy disclosure as compared to the previous year, in terms of the company’s STI [short-term incentive] and LTI [long-term incentive] schemes, the KPIs [key performance indicators] remain financially skewed with no sustainability measures. This is regardless of the fact that the Group Executive Directors did not meet the performance bonus in 2015”.
